High net worth investor Nimal Perera yesterday effected his first major move to become a self-made entrepreneur by buying the famous Tangalle Bay Hotel for Rs. 220 million.

The acquisition of a controlling 70% stake was via Nimal’s newly-floated personal venture N Capital Ltd., on the lines of his recreation firm N Sports Ltd.

Nimal told the Daily FT that his decision to foray into deep south tourism was with a firm belief that Hambantota in particular and the Southern Province in general would become the future centre of tourism, leisure, sports and recreation in Sri Lanka as well as a thriving industrial and service economy in tandem with the Government’s aggressive development plans such as international air and sea ports as well as the extension of the Southern Expressway.

Built to resemble a cruise ship, Tangalle Bay Hotel is a 35-room resort located on a four-acre land area with scenic beauty. It was one of first hotels owned by the late business leader Gilbert Jayasuriya and the 70% stake was acquired from International Enterprises Ltd., owned by his family. The balance 30% stake will be bought by engineer turned entrepreneur Pasan Madanayake.

At present family-owned leisure industry giant Jetwing Group manages Tangalle Bay Hotel after a recent US$ 1 million refurbishment for the 2011/12 winter season. Jetwing will continue managing the resort until required.

Following the acquisition Tangalle Bay Hotel is also set for a major expansion and refurbishment with a further investment of around Rs. 500 million after the conclusion of the winter season. Among plans are building 50 new rooms in a new wing, a presidential suite, a new spa and major refurbishment to make the resort luxurious.

Cash for the acquisition is from the sale of around a 20% stake in George Steuart and Company by Nimal to his co-investor Dilith Jayaweera recently.

The price paid (Rs. 220 million) by Nimal for Tangalle Bay Hotel appears a good buy. Last month LOLC Leisure bought the famous Dickwella Resort for Rs. 1 billion. However Dickwella has 76 chalet type luxury rooms built on a six acre land, also in a picturesque location on south coast.

Tangalle Bay Hotel was part of a unique portfolio of resorts originally owned by industry doyen Gilbert Jayasuriya. Others included Ocean View Ltd., Induruwa Beach Hotel and Hikkaduwa Beach Hotel.

Tangalle Bay Hotel at present boasts a large outdoor pool and an Ayurvedic Treatment Centre. It is located on the beach in the fishing port of Tangalle and features rooms with private balconies and free Wi-Fi in public areas.

Rooms are bright and airy, offering great views of the sea. They are spacious and come with air conditioning, cable TV and a mini bar. All rooms have private bathroom facilities.

Guests can enjoy water activities like fishing and waterskiing or arrange for excursions to cave temples and the Bird Sanctuary Park at the tour desk. For a relaxing afternoon, Tangalle Hotel provides massages and Ayurveda treatments.

Tangalle Restaurant, which faces the ocean, serves both Asian and Western dishes.

The Tangalle Bay Hotel is about 190 km from Colombo and 240 km from Bandaranaike International Airport. With the extension of Southern Highway to Hambantota travel to Tangalle Bay will be quicker ensuring greater traffic of local guests as well.

Following the opening of the first phase of the Expressway, all hotels up to Galle and nearby are enjoying greater clientele. The opening of Mattala Airport in October this year and the completion of the expressway up to Beliatte by next year will considerably improve the appeal for tourism and economic activities in the deep south.

Quicker access to the east coast via Hambantota as well as the latter’s rich diversity as a tourist destination including wildlife will see an exponential growth in tourism in to these areas, according to industry analysts.

he Government of the People’s Republic of China has given concurrence to Sri Lanka to set up a new Consulate General in Guangzhou, the capital of Guangdong Province of Southern China.

Yu Hong, Vice Director General of the Consular Department of the Ministry of Foreign Affairs of China presented the formal agreement giving concurrence to the opening of the Consulate General on 18th January 2012 to Sri Lanka’s Ambassador to China Ranjith Uyangoda during a special meeting held in the Ministry of Foreign Affairs in Beijing.

The Consulate General in Guangzhou will facilitate the expansion of bilateral relations between Sri Lanka and China in areas of economy, trade and tourism while further strengthening people to people contacts between the two countries. Sri Lanka Government has already appointed a Foreign Service Officer to the position of the Consul General in Guangzhou.

This will be the third Sri Lankan Consulate Office in China, following the establishment of the Consulate General in Shanghai in 2007 and the Consulate in Chengdu in 2009.

Guangzhou, popularly known as Canton, is the main manufacturing hub of the Pearl River Delta and one of China’s key commercial and manufacturing regions. The China Import and Export Fair, also known as the ‘Canton Fair’ is held biannually in Guangzhou. Sri Lanka, with the increased number of companies, continues to participate at this trade fair.

A special beach nourishment project to recreate the coastline has been introduced by the Coast Conservation Department (CCD) for the first time in Sri Lanka to combat coastal erosion, CCD Deputy Director (Planning) Gamini Hewage told the Daily News..

He noted that a one km coastal stretch from Palliyawatte to Uswetakeyyawa had initially been selected to carry out this project.

Under this project, sand pumped from the deep sea will be used to fill the coastline recreating the beach. This is done using a sand pump vessel.

He said that breakwaters would also be constructed to prevent the sand from been washed back in to the sea.

Hewage said that Rs 270 million has been allocated for this project. The work of coastal stretch from Palliyawatte to Uswettakeyyawa is to be completed within this year. He said that this coastal stretch had been selected considering the accelerated coastal erosion experienced in the area..

He stated that under the first phase, half of the distance of the selected coastal stretch would be completed.

He noted that a foreign company has been contracted for this project, under the supervision and coordination of the Department. The project has been launched under the direction of Economic Development Minister Basil Rajapaksa.

Hewage said that as the Coast Conservation Department expects to extend this project to a four kilo metre coastal stretch in Marawila where the next highest rate of coastal erosion has been reported.

He observed that the beach nourishment work in Marawila would be commenced within this year.

He observed that the tourism industry and coastal residents have been affected by sea erosion over the past years, adding that the new project would provide a satisfactory solution to the problem.

The International Monetary Fund announced today the creation of a new department focused on helping member states build capacity and develop their key economic and financial institutions. The new department will be formed by merging the IMF Institute and the Office of Technical Assistance Management, enabling stronger synergies between technical assistance and training to better reflect country priorities, facilitate fund raising, and benefit from economies of scale. The decision, which will entail no additional budget costs, follows a discussion by the Executive Board in November 2011 of a Report of the Task Force on the Fund’s Technical Assistance Strategy. It is expected that the new department will begin operating in May 2012.

“We appreciate the high value that member countries place on the technical assistance and training the Fund provides, and we intend to preserve and build on the strengths of both,” IMF Managing Director Christine Lagarde said. “This new department will allow us to improve our institutional development and capacity-building activities to help our members meet the economic challenges of a complex and fast-changing world,” Ms. Lagarde added.

• Defining an institutional development and capacity-building strategy for the Fund—in consultation with other departments—and updating it over time in response to the evolving needs of Fund members.

• Coordinating the provision of technical assistance and training across departments, with the aim of ensuring that these activities are driven by member country demand, focused on the Fund’s core macro (economic and financial) mandate, and integrated with its surveillance and program responsibilities.

• Designing and delivering, in cooperation with other departments, training that reflects member countries’ and Fund staff’s needs.

• Enhancing partnerships with donors and other key stakeholders to underscore that the Fund is modernizing and increasing the efficiency and effectiveness of its institutional development and capacity-building activities. Designing and coordinating processes for evaluating the effectiveness of technical assistance and training will be important in this regard.

• Ensuring that the network of regional training and technical assistance centers is efficiently managed with a view to building a global network of capacity-building centers over the medium-term.

• Reporting to and seeking strategic guidance from the Board through periodic reviews of the Fund’s technical assistance and training.

Former President of India, A.P.J.Abdul Kalam suggested that deep sea fishing, and fishing in turns in the Palk Bay, as possible solutions to resolve the contentious fisheries issue that India and Sri Lanka have been grappling with for the past few years.

He suggested that of the seven days of the week, Indian and Sri Lankan fishermen should fish in turns for three days each, leaving one day for resting. During this time, both fishermen could cross each others boundaries. “Wherever there is fish they cross borders. Nobody can stop them… Of course, both governments will have to bless,” he said.

Mr.Kalam, who hails from the fishing hamlet of Rameswaram in Tamil Nadu, pointed out that “a very small country in Europe” had a per capita income of US $ 40,000 because its fishermen had resorted to deep sea fishing in a major way, while Sri Lanka had a per capita income of about $ 3000 and India, about $ 2000. He suggested that if Indian and Sri Lankan fishermen took to deep sea fishing, they would earn more and contribute better to the economies of their countries.

Mr.Kalam, who is on a four-day visit to Sri Lanka, had discussed this and many other issues with Sri Lankan President Mahinda Rajapaksa. Mr.Kalam had come here to take part in the launch of the tri-lingual initiative, aimed at making the next generation Sri Lankans fluent in Sinhala, Tamil and English. Mr.Kalam said that he had discussed the fishermen problem with the President. “I come from the fishermen area in Rameswaram. So, I know their problems,” he said

Mr.Kalam, the most prominent Tamil to visit Sri Lanka since the visit of Carnatic vocalist T.M.Krishna, said that he had also discussed empowering the various provinces with Sri Lankan President Mahinda Rajapaksa based on the 13 Amendment to the Sri Lankan Constitution. “How the empowerment can take place constitutionally…We had a discussion on this,” he said.

Asked for his impressions from the visit, he said that he could see that there was progress in development works. “The beginning has been made with the Trilingual mission. So many reforms, empowerment to the various provinces particularly North and the East, I hope will take place, with both governments working together. They are thick friends, I suppose,” he was quoted as saying by The Hindu.

Mr.Kalam said that the reaction to his suggestion that the concept of PURA (Provision for Urban Amenities in Rural Areas) was good. Many Ministers and others felt that this could be carried out in the 40,000 Sri Lankan villages. “I personally believe that… the Sarvodaya movement here, and the PURA can be integrated and work together to build the 40,000 villages,” he said.

The trade relationship between Sri Lanka and France has recorded a significant growth in the past two years. Reviewing the trade performance between Sri Lanka and France we see an encouraging revival with healthy increase in both imports and exports, despite challenging business conditions. Exports to France in 2010 increased by 12% to US$ 160 million compared to the previous year, Sri Lanka France Business Council Immediate Past President Nirmali Samaratunga said.

The apparel exports accounted for the major share, notwithstanding removal of the GSP plus facility. The imports from France showed an impressive increase of 49% to US$ 152 million as against the previous year, with 46% of the total been on account of imports of electrical machinery and equipment, she said at the recently held AGM in Colombo.

The first quarter figures of 2011 indicated an upward trend, with exports showing an 11% increase and imports a 154% increase over the previous period, which is encouraging.

The economy of France which was impacted by the downturn of 2009 has shown resilience and recovery in the years that followed. The first quarter of 2011 indicated that the economy has been growing at a stronger pace than expected at 0.9% - one of the best in Europe, although in the period July-September has slowed down to 0.4%. ‘Meanwhile we need to be mindful of the emerging situation in the Euro Zone and the growing sovereign debt problem of several countries leading to a possible recession in the Euro Zone.’

‘We need to be geared to minimize the threat of a possible global economic slowdown which would impact both our countries,’ he said.

Total trade stood at just over US$ 300 million in 2010, with balance of trade remaining in favour of Sri Lanka. It is a mere fraction of the country’s total trade, exports being 1.9% of total exports and imports just 1.2% of the country’s total imports. The investment continues to be around $ 45 million again highlighting the potential for greater French investments especially with the emerging opportunities in the newly liberated areas in sectors such as agriculture and fisheries as well as in the rebuilding and strengthening of the country’s infrastructure.

All this indicates the untapped potential, which our Council can play a role to harness especially in view of France being the 5th largest economy globally. The strategy is to identify sectors, hitherto untapped, where there is emerging potential for Sri Lanka products, and where our products, notwithstanding the loss of duty concessions and preferential trade facilities, can hold its own. These include high end, value added products, marketed particularly through niche marketing and branding.

Furthermore, it is necessary to identify and focus on the emerging market trends in Europe including France, where demand is growing for eco friendly and health products such as organic products and herbal medical products such as ayurveda products.

We need to target such areas where our products have a competitive edge. The recent Budget 2011 proposals which are development oriented with strong focus on exports and upgrading technology and research and development will be a further support. France’s strengths also need to be exploited to a greater degree in key industries such as telecommunication, machinery and pharmaceuticals, through greater awareness and promotion and linking Sri Lanka business with French counterparts. The inward and outward trade delegations can play a very valuable role in facilitating this, Samaratunga said.

Vandana Luthra, Founder and Mentor of VLCC, largest health and wellness brand is set to arrive in Sri Lanka next week to visit the VLCC centres at Wijerama Mawatha, Colombo 07 and Nugegoda.

Ms. Vandana Luthra, a pioneer in the wellness domain, opened India's first Transformation Centre in New Delhi in 1989. Since then, the network has spread all across South Asia and the Middle East and has been in operation in Sri Lanka since January 2011, initiating the concept of complete transformation, with slimming and beauty as two sides of the same coin.

Having redefined the wellness industry, VLCC boasts an impressive network spread across 260 locations in 120 cities, in 9 countries, including Sri Lanka, India, Bangladesh, Nepal, UAE, Oman, Bahrain, Qatar and Kuwait. VLCC employs over 6000 professionals, a majority of whom are doctors, nutritionists, psychologists, cosmetologists, beauticians and physiotherapists. Since its inception, VLCC has served over 10 million satisfied customers, making it the most preferred slimming, beauty and health brand in the countries it operates in.Ms. Vandana Luthra, the guiding force behind this multi-national company is among Fortune magazine's list of the 50 most powerful businesswomen in India. Ranking 38th on the Indian version of Fortune magazine - Ms. Vandana Luthra is a dynamic educationist. Ms. Luthra is scheduled to visit the Sri Lankan VLCC centres and will speak on the extensive range of brand products during her visit to Sri Lanka next week.

Earlier this month, Spence pulled out of the joint venture with the state-run Sri Lanka Ports Authority (SLPA) and China Merchants Holdings due to high costs and unreasonable demands, officials have said.

Aitken Spence in a statement to the Colombo Stock Exchange said Sri Lanka's Board of Investment and the SLPA had approved the sale to China Merchant. The company did not disclose how much it was to be paid.

China Merchant upon completion of the transaction will own 85 percent of China International Container Terminal, the joint venture operating company set up to build the Colombo south terminal. SLPA will continue to hold 15 percent. ($1 =

The first stage of the Atchuveli industrial zone would be ready by March this year. Several local and foreign investors have expressed interest to commence operations. The President of The Chamber of Commerce and Industry Yarlpanam, K.Poornachandran said that the first stage would include the developing of 25 acres and a further 67 acres would be added to the second stage. ‘Under the first stage 40 companies would operate and the total direct and indirect employment from the project would be over 6,000.’

One of the biggest advantages similar to the Hambantota airport and harbour industrial zones would be the close proximity of an international harbour and airport. “The Palali airport which is to be elevated to an international airportand Kankesanthurai harbour are located less than 10 kilometres to the zone giving investors the opportunity for exports,” he said speaking at the opening of the three day Jaffna International Trade Fair (JITF) which was concluded last Sunday at Alfred Dureiappa Stadium.

He requested the Indian government to open credit line through EXIM so that small and medium entrepreneurs could obtain financial assistance to expand. He also appealed to expedite rebuilding the railway to Jaffna.

“The JITF also helped them find new markets,” he said. “Year 2012 is completely development oriented, and therefore the trade fair is also focused on development.”

Consul General of India in Jaffna, V. Mahalingam said the Indian government would be investing US $ 20 million to rebuild Kankasanthurei harbour. ‘This would be ready by March,” he said. He also said that the Indian government is also assisting in upgrading Palali airport which too would be ready mid this year.

Government Agent, Jaffna Emelda Sukumar said that by the end of the year the province would have total coverage of electricity and all main cities would have pipe borne water. “Pipe borne water in Jaffna would be utilized for industries,’ she said. She also assured that a carpeted road network to Jaffna from Vavuniya would be completed in two years.

The President of the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) Kumar Mallimaratchi said that JITF helped inhabitants and traders of Jaffna to make technological exchanges and be in line with the vast advances that have taken place in technology. ‘This will help the traders in their endeavour to create more efficient and sustainable businesses,” he said.

Recently, the Northern Province recorded a provincial nominal GDP growth rate of 14.2 per cent, the second highest in Sri Lanka and Central Bank Governor Ajith Nivard Cabraal earlier this month predicted that the North and East wereexpected to grow at 13 percent during the next four years.

An Indian salt manufacturing company will start operations on one of Sri Lanka’s largest salterns at Elephant Pass mid this year.

Consul General of India in Jaffna, V. Mahalingam said that they have already provided technical assistance to commence this plant.

He also said that the Indian government has also agreed to provide 10,000 push bicycles to the North East and an Indian company would soon start a bicycle assembly plant in Vavuniya.

He also said that travellers from North East to India have increased for leisure, pilgrim, education, business and for health purposes. ``We process around 50 to 75 applications each day,” he said.

He also said that the State Bank of India would open one of its branches in Jaffna making it the second Indian bank after Indian Bank to operate in Jaffna. “In addition Indian Life Insurance Corporation too is looking at opportunities in Jaffna,” he said.

The capacity expansion and overall target can be accelerated with improved or expedited investor and project facilitation, Godahewa understandably referring to read tape and bureaucracy.

“My Government, my President, my Minister and my Secretary are committed to ensure a rapid growth under the industry’s strategic plan and we will support private sector endeavours,” Tourism Chief Godahewa said at the opening of 93-room Citrus Hikkaduwa by Economic Development Minister Basil Rajapaksa.

He also said that tourist arrivals up to Saturday or first 21 days of January had reached 82,508, a development, Tourism Chief said reinforces hope of the country achieving the milestone of 100,000 arrivals mark for the first time in history. “This is a fantastic start for 2012,” he added.

Despite reservations expressed on account of new visa scheme, tourists are coming and income earned from the visa scheme so far amounts $ 524,000,” Godahewa revealed.

Tourism Chief also expressed confidence that earnings from tourism in 2012 will exceed $ 2 billion, a massive jump from near $ 1 billion (over $ 800 million) last year. He emphasised that encouraging increase in arrivals so far this year was on the back of 30% growth in 2011 and over 40% increase in 2010. “We are confident of achieving the target of 2.5 million tourist arrivals by 2016,” he added.

Newest but fastest growing in the hospitality industry, Citrus Leisure Plc, on Saturday kicked off its planned 600 room foray to better harness the post-war rebound with the opening of 93-room and Citrus Hikkaduwa.

Citrus Leisure Chairman Prema Cooray, a veteran hotelier, said that the Company plans to build 150 room resort in Waskaduwa by 2013, a 155-room plus a Presidential Suit and 50 exclusive Villas in Kalpitiya, and a further 40 Villas initially in Pasikuda. He also revealed that a 200 room city hotel in Hambantota is also on the cards.

The resort (previously known as Amaya Reef), was expanded from the original 50 room in addition a sleek refurbishment, all completed within a record five months. The new resort includes 51 standard rooms, 40 delux rooms and two suites.

Furthermore, a brand new 190 pax banquet hall, a 140-capacity restaurant – Lemon Fish, a tranquil Spa as well as an exclusive wine and cigar bar – Summer Salt have been added.

“Following the end of the war, Sri Lanka’s tourism profile has considerably improved. We (Sri Lanka) are on a high. The attractiveness is unparallel in this part of the region whilst Sri Lanka’s biodiversity is also the highest in Asia.

Citrus will lead from the front in harnessing the true potential of Sri Lanka,” Cooray said.
Citrus Chief also said that the business model pursued by the Company was unique and it is energetically driven by its major shareholders – Divasa Equity, owned by the trio – DilithJayaweera, VaruniAmunugama Fernando and Sarva Ameresekere.

In a bid to complet the offering, the Company has launched Citrus Vaccation to handle in-bound and outbound travel whilst to Citrus Aqua has been floated to maximize the potential in water-based recreation.

22 January 2012

Sri Lanka’s national carrier, Srilankan airlines has opened a restaurant in the capital city of Colombo.

The restaurant which has come up in the former Dutch hospital which is now converted to a restaurant and a shopping facility is named as “Semondu”.

The Airline says “semondu” was derived from the word “Simoundou”, an ancient name given for Sri Lanka by Ptolomy, the famous Roman mathematician, astronomer, geographer, astrologer, and great poet.

“Semondu’s team of Chefs dish out an array of fusion cuisine, blending flavours, mixing and matching Asian and European cuisine, with an oriental touch” added a statement issued by the Airline.,

The Airlines city restaurant is operated by SriLankan Catering a fully owned subsidiary of SriLankan Airlines.

SriLankan Catering also manages the 24-room “Serenediva” Transit Hotel at the Katunayake International Airport, and also runs a state-of-the-art, mass-scale laundry facility which is capable of laundering up to 15,000 pieces per day.

"JKH is currently exploring possibilities of a mega integrated development at an estimated US$ 750 million on its Glennie Street headquarters land," the report said.

It went on to say that this project would comprise two five-star hotels, malls, residential towers, conference centers and office complex spanning over an estimated 3.8 million sq. ft.

"The group’s vast real estate portfolio with large contiguous blocks of land in the heart of Colombo provides an ideal opportunity for such projects," the report said.

JKH itself was tight lipped about its plans on this mega development with senior company officials merely saying that they are examining various possibilities and working in parallel on matters including designs, approvals and numerous other formalities that must precede a development of this nature.

"The intention is there but delivery is another matter," a senior company official said yesterday. "We are making no formal announcement until everything is in place and we will do so when we are in a position to definitely state that we will go ahead with such a project," he explained.

The company declined to place any timeframe for the commencement and completion of the project if it takes off.

The IIFL report says that JKH is "the largest non-government land owner in Colombo" with 25 acres of Colombo land at prime locations in the city.

A significant portion of this city land portfolio is currently unutilized and presents immense potential for unlocking value, it said.

It noted that Shangri-La recently set a new benchmark for property prices in Colombo paying US$ 125 million for 10 acres at Galle Face and at that benchmark, JKH’s Colombo land value will almost equal a fourth of the conglomerate’s current market capitalization.

The report further noted that JKH also has 120 acres outside Colombo excluding hotel lands and these can be utilized to develop further leisure assets.

Although the JKH share has been falling in recent weeks and closed at Rs. 163.30 on Friday. The IIFL report gives a strong ‘buy’ recommendation on the counter saying that "the stock offers 39% upside" in a 12-month horizon. It has placed a target price of Rs.239 for the share one year down the road.

The report says that JKH is an "ideal play" for Sri Lanka’s economic revival given its presence in port operations, leisure, consumer food and retail and property.

"A track record of competent management and a strong balance sheet would help JKH sustain and strengthen its leadership position across sectors,’’ the report said noting that it was the largest and among the most liquid stock quoted on the Colombo Stock Exchange.

It also said that JKH has a cash chest of Rs.53 million "to exploit emerging opportunities."

The approval, valid till November 1, 2012, is subject to compliance with the requirements specified by the Environmental Protection Department in Hong Kong.

“We have received the Basel Convention export license from the Central Environmental Authority (CEA) for the export of electronic waste,” said Kaushal Rajapaksa, chief executive of the Kalhari Group.

Kalhari Group, which is already involved in the export of recycled or recyclable waste materials, recently signed an agreement with Epsi Computers for the collection and disposal of e-waste as well as other solid waste.

“Electronic waste is a new area for us," Rajapaksa said. "We expect to provide Sri Lankans the facility to easily dispose of their electronic waste including computers and mobile phones.”

Kalhari aims to expand the collection of e-waste to the entire country and has already lined up major players in the industrial sector who are e-waste generating companies as potential partners, he added.

Kalhari Group, which now exports around 200 tonnes of waste material a month, is one of the main companies recycling and exporting PET bottles and plastic waste.

Its recycling business includes waste from the tyre, latex, garment and steel industries.

The group consists of five companies and exports recycled waste material to several countries including China, India, Malaysia, Vietnam and Japan.

The cashew plants are to be distributed under the Divi Neguma National Development Project which is monitored by the Economic Development Ministry under the guidance of Economic Development Minister Basil Rajapaksa.

Plans are underway to distribute around 10,621 cashew plants among residents in Moneragala district, Pathiranage said.

Over 95 percent of cashew plants have already been distributed in Thanamalvila, Wellawaya, Buththala, Kataragama, Madagama and Badalkumbura.

Arrangements are also being made to distribute around 28,000 cashew plants under an agricultural subsidy programme. Cashew will be cultivated in a 350 acre land.

"The Sri Lanka Cashew Corporation has obtained plants from its bud plant nursery in Kumbukkana, Moneragala.

Sri Lanka’s tea production fell in 2011 from a record high in the previous year due to bad weather, but the top agricultural export earned a record $1.5 billion, the State-run Tea Board said on Thursday.

Tea output in 2011 fell 0.9 per cent to 328.37 million kg from the previous year’s record 331.43 million kg. Output in December fell 6.8 per cent to 25.47 million kg from 27.32 million in the same month in 2010.

The Tea Board had expected full-year output to end near last year’s revised 331.43 million kg
.
Hemaratne said provisional data shows export revenue from earned a record $ 1.5 billion this year, up from $ 1.4 billion last year, despite turmoil in the Middle East and North Africa, home to some of Sri Lanka’s major customers.

Tea is one of the $ 59 billion economy’s main foreign currency earners, along with remittances, garment exports and tourism.

The Governor of the Central Bank of Sri Lanka, Ajith Nivard Cabraal on Friday declared open a new bicycle manufacturing plant owned by B S H Ventures (Private) Limited, a joint venture between Bangladesh, Holland and Sri Lanka at the Biyagama Export Processing Zone.

The company, which has invested US $4 million in the venture, is set to produce branded bicycles to cater to the European market in its factory. The Governor along with the firm’s Managing Director, Jeyam Perumal are seen touring the new plant, which is capable of producing around 1300 bicycles a day. (Pic by Rukshan Abeywansha).

Central Bank Governor Ajith Nivad Cabraal and Jeyam Perumal of BSH Ventures ride bicycles on an inspection tour of a BSH bicycle assembling plant which was opened at the Biyagama Free Trade Zone on Saturday. (Image Courtesy By www.island.lk. Pic by Kamal Bogoda).

21 January 2012

The Palali Airport will be upgraded as an international airport for Indian traffic and regional passengers, said Traditional Industries and Small Enterprise Development Minister Douglas Devananda.

Speaking to the Daily News after inaugurating the third edition of the Jaffna Trade Fair yesterday, the minister said that the Indian government is assisting this project and work is in progress.

The minister said that an additional Rs one billion will be allocated by the government for infrastructure development in the Northern Province this year.

Devananda said that the on going exhibition organized by the Federation of Chambers of Commerce and Industry with Lanka Exhibition and Conference Services (LECS), which concludes tomorrow, has helped Northern entrepreneurs to find Southern partners and also acquire new technology.

“The Indian government will continue to assist the North and East reconstruction process and will also find an Indian partner to review the Elephant Pass saltern in the area which has not been operating for the past 20 years,” said Consul General of India in Jaffna, V Mahalingam.

“They will also help with infrastructure development of the Palali Airport elevating it to an international airport and also develop the Kankesanthurai Harbour at a cost of US 20 million,” Mahalingam said. He said that the Indian government is helping in the infrastructure development of the Achuveli Industrial Zone which is expected to be ready by April.

Mahalingam said that the 50, 000 housing project which is provided by India is the single biggest investment by the Indian government to any country with an investment of US $ 270 million.He also told the Daily News that they issue around 50 to 75 visas per day to travel to India for both leisure and business.A record 304 stalls with 40 Indian companies are showcasing their products this year. The organizers have also invested Rs 2.5 million to provide a sprinkler system, fence and lighting system for the Duraiappah Stadium as part of their CRS towards Jaffna, LECS director Imran Hassan said. Associated Newspapers of Ceylon Limited is the media sponsor of the event.

The trade fair is set to attract over 200 companies both local and international, exhibiting in over 300 stalls. The organizers expect a capacity of over 60,000 visitors spanning from all areas of trade within the peninsula to be a part of the Jaffna International Trade Fair.

Within the course of three years the Trade Fair has been earmarked as a must witnessed event by many of the local traders and inhabitants as it paves the way for the direct synthesis and merging of the Peninsula with other parts of the global and local trade.

The region which was ravaged by war for over three decades has within it an immense potential to become a trade hub of its own and Lanka Exhibition and Conference Services have ensured that the trade fair helps realize this unearthed potential of the beautiful fort city.

Director of LECS Imran Hassan believes that the trade fair will evolve into being the most influential market place for the traders of Jaffna and those outside the region. "During the past years we held this event we have seen the enthusiasm within the locals and the exhibitors to create and add value to their product and services. The fair has been the ideal meeting ground for small timers as well as big players of the region to witness firsthand the emerging markets and technologies that could be applied in the peninsula. It has also paved way for networking and the strengthening of trade ties between different regions," he said.

The industries segmented include but are not limited to, tourism and hospitality, construction, food, beverages and packing, agriculture, fisheries, Information and communication technology, apparel, automobile, financial services and consumer goods.

Sri Lanka’s search for FDIs received a major boost yesterday with Japan’s top multinational conglomerate, Marubeni Corporation, announcing its intension of returning to Sri Lanka after leaving these shores in 2008 citing the then weak economic environment. Since then, a lot has changed and top officials of the Japanese diversified group visited the country on a fact-finding mission to recommence operations here, the Ministry of Industry and Commerce said.

"Marubeni wants to re-commence operations in Sri Lanka in due course. The discussions with their fact finding mission today was very successful," Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka said yesterday (Jan. 19).

Marubeni’s fact finding mission was led by Wataru Yoshida, Marubeni’s Tokyo based Corporate Officer and Senior Operating Officer and comprised three other officials including Shinya Watanabe, Chairman and Managing Director of Marubeni India.

Marubeni, which was already active in Sri Lanka for 25 years, closed its operations on May 1, 2008 citing unfavourable economic conditions. Marubeni’s return is also expected to boost Sri Lanka’s FDI inflows further.

"We also are present in power projects and infrastructure, plants and industrial machinery, finance, logistics and information industry, and real estate development and construction," said Wataru Yoshida. "We are the largest independent power operator in Japan and energy trader in Japan. We have more than 40 operations across the world including Qatar and even Papua New Guinea. We have projected a net profit of US$ 1.8 billion for 2011 which we want to invest in selected countries, including Sri Lanka. Now, we want to recommence operations in Sri Lanka. In fact, we want to open our Colombo office as soon as possible," Yoshida said.

Shinya Watanabe, Chairman and Managing Director of Marubeni India revealed: "Marubeni India is keen on power projects in Sri Lanka. Marubeni India is now in a position to supply with LNG Gas (Domestic gas) to Sri Lanka if necessary, using our LNG terminals across the Eastern Indian shore. We import around five million tonnes of LNG to India." Shinya Watanabe added: "We are also strong in the Combine Cycle Power Plants (CCPP) sector which we think that Sri Lanka can make good use of. We already have ongoing CCPP projects in Thailand and Indonesia in association with Siemens, among the many project countries." CCPPs use both gas and steam turbines to supply power to the grid and is considered to be an efficient generation mechanism since it uses waste heat to produce steam which in turn generates additional electricity through the steam turbine.

A leading company in Russia, Gazprom expresses its willingness to construct a hotel in Sri Lanka, in order to promote tourism between Sri Lanka and Russia.

This hotel would comprise more than 200 rooms, with all the facilities.

Tourist arrivals from Russia has sharply increased since 2011 and plans are under way to increase the number of tourist arrivals to Sri Lanka from 23,000 in 2011 to 50,000 by the end of 2012.

Ambassador of Sri Lanka to Russia Udayanga Weeratunga told Daily News Business that, Sri Lanka has drawn up plans to promote market tourism and Russia is ideal for this. Russia was listed seventh on the listed highest spending market.

There has been a sharp increase of tourist arrivals from Russia to Sri Lanka due to the commencement of direct airlines from Sri Lanka to Russia.

Aerosvit is being operated three times a week from Kyiv to Colombo and Aeroflot being operated twice a week from Moscow to Colombo. SriLankan Airlines has commenced a flight between Colombo and Moscow since last September.

This flight via Dubai is scheduled twice a week.

These three aircraft is capable of accommodating more than 1,000 passengers per week.

Sri Lankan Embassy in Russia has taken measures to introduce a tourist guidebook in Sri Lanka to promote tourism.

There is a shortage of Russian speaking people in Sri Lanka and it is a major disadvantage of promoting tourism between Sri Lanka and Russia.

Tourism is among the main drivers of economic growth, major tourist attractions focused around the island are the famous beaches located in the southern and eastern part of the country.

Sri Lanka’s tourist arrivals increased by 30 percent to 855,975 from January to December 2011, compared to 2010. Tourist arrivals are expected to increase sharply over the next few years due to intensive marketing of Sri Lanka as a world-class tourist destination.

"The speakers will discuss and examine topics that will be of interest to lawyers and the business community," the organizers said in a statement.
"The potential benefits to Sri Lanka are enormous in terms of foreign exchange earnings and employment opportunities."
Sri Lanka has skilled human resources, relatively cheaper cost, state endorsement of the industry and a legal system based in large part on principles of English law, the conference organizers said.

Since the dawn of peace in 2009, Sri Lanka's investor-friendly economy has been growing at over 6% per year. The recently elected government is fully dedicated to good governance and transparency, and has already reconnected the country to the wider world and attendant opportunities.
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